Liquidity Ratios Sample Clauses

Liquidity Ratios. Liquidity ratios also called solvency ratios and include the current ratio, quick ratio, net working capital. They measure the firm's ability to satisfy obligations as they become due. • Current Ratio • Quick Ratio • Net Working Capital
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Liquidity Ratios. I. Liquidity Ratios Liquidity ratios also called solvency ratios and include the current ratio, quick ratio, net working capital. They measure the firm's ability to satisfy obligations as they become due. Current Ratio current ratio = current assets / current liabilities Measurers the firms ability to meet it's short term obligations. A current ratio of 2.0 is generally acceptable, but depends on the industry. 1.0 may be ok for a utility company, but not a manufacturer. The more predictable a firm's cash flows, the lower the acceptable current ratio. With a current ratio of 2.0 a firm can still cover it's current liabilities if its assets shrink by 50%. With a current ratio of 1.0, it's net working capital is zero. Current assets include cash, marketable securities, inventory, and prepaid expenses. Current liabilities includes accounts payable ( 1 year or less) , current portions of long-term debt, and salaries payable. The current ratio measures the ability of the firm to pay is current bills while still allowing for a safety margin above their required amount needed to pay current obligations.
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Liquidity Ratios 
Sample 1

Related to Liquidity Ratios

  • Liquidity Ratio A Liquidity Ratio of at least 1.50 to 1.00.

  • Liquidity Coverage Ratio The Seller shall not issue any LCR Security.

  • Debt to Equity Ratio The Lender shall have received from the Borrower a certificate demonstrating that the ratio of the Borrower's Adjusted Indebtedness to the Borrower's Net Assets, taking into account the requested Loan or Letter of Credit and the assets, if any, to be acquired by the Borrower with the proceeds of such Loan or Letter of Credit, shall not exceed 4-to-1.

  • Leverage Ratios Notwithstanding anything to the contrary contained herein, for purposes of calculating any leverage ratio herein in connection with the incurrence of any Indebtedness, (a) there shall be no netting of the cash proceeds proposed to be received in connection with the incurrence of such Indebtedness and (b) to the extent the Indebtedness to be incurred is revolving Indebtedness, such incurred revolving Indebtedness (or if applicable, the portion (and only such portion) of the increased commitments thereunder) shall be treated as fully drawn.

  • Cash Flow Leverage Ratio The Borrower will not permit the Cash Flow Leverage Ratio on the last day of any fiscal quarter to exceed 3.50 to 1.00.

  • Cash Flow Coverage Ratio The ratio of (a) the Borrower's Cash Flow to (b) the sum of (i) the Borrower's consolidated Interest Expense plus (ii) the Borrower's scheduled payments of principal (including the principal component of Capital Leases) to be paid during the 12 months following any date of determination shall at all times exceed (1) 1.5 to 1.0. Compliance with the ratio will be tested as of the last day of each month, with Cash Flow and Interest Expense being calculated for the twelve months then ended.

  • Adjusted Leverage Ratio The Borrower shall not permit the Adjusted Leverage Ratio as at the end of any Fiscal Quarter to be greater than the following for the respective periods set forth below: Period Adjusted Leverage Ratio Closing Date to and including March 27, 2004 3.75:1.00 March 28, 2004 to and including June 26, 2004 4.75:1.00 June 27, 2004 to and including July 2, 2005 5.60:1:00 July 3, 2005 and any time thereafter 5.25:1.00

  • Minimum Current Ratio Permit the Current Ratio at the end of any fiscal quarter to be less than 1.00 to 1.00.

  • Debt Service Ratio In the event that the amount of Borrower's unrestricted cash maintained at Bank is less than $1,300,000.00, a ratio of (i) net income plus interest, depreciation, and amortization, minus unfunded capital expenditures, and minus cash taxes paid, calculated based on the three (3) month period ending as of the date tested, to (ii) principal and interest expense with respect to the Obligations, calculated based on the three (3) month period ending as of the date tested, of greater than 1.25 to 1.0." and inserting in lieu thereof the following:

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